Passing on the Torch: Succession Planning for Your Practice

“What happens to my clients when I retire?” Regardless of the size of your practice, it’s a big question with some potentially big implications.

Depending upon where you are in your career and personal life, you may not even have begun the process of considering a succession plan. For some, the idea alone is like trying to wrap your head around retirement when you’re in your mid-20s.

For many others, however, the prospect of passing an established practice on to another professional is a here-and-now kind of conundrum. Fortunately, the tax business is one that’s been around for millennia, and that means there’s a wealth of experience out there to help you decide what’s right for you.

Keeping it in the Family? Or Sourcing Your Younger Colleagues?

If the successor you have in mind is a son, daughter, sibling, or any other relative, chances are good that you’ve already discussed plans with your intended inheritor. Many tax professionals choose to hand the proverbial baton over to a likeminded family member, and this works well for hundreds of practices — though, for others, it isn’t always a viable option.

If you’re looking ahead and can’t seem to think of a worthy successor for your practice, perhaps it’s time to consider colleagues or apprentices you appreciate and admire. You’ve worked hard to build your business, and you want to be certain that your work ethic is preserved — even when you’re no longer at the helm.

You know your clients and their financial circumstances better than anyone, so determining your successor should begin with that knowledge. For example, do you primarily serve families in your own community? If so, do those families expect the same level of one-on-one interaction that you’ve provided in the past? Finding a successor with the ability to build rapport quickly would be key in this type of scenario.

However, if the majority of your clients are accustomed to long-distance service — and are more concerned with numbers than names and familiar faces — you might not feel as pressured to find someone local to take the reins. Ultimately, it comes down to finding a person you can trust to carry on your commitment and uphold the reputation you’ve built.

Planning for Succession: Do I Need to Start Now?

The “I’ll figure that part out later” approach can be tempting, especially during one of the busiest times of your year. But the hassle and headache that you’ll save yourself later is more than worth the thoughtful planning now. And as always, TaxAct Professional® has your back when it comes to looking ahead, so never hesitate to contact us with questions about tax prep and the software that helps you do it. We look forward to serving you — and your successor — for years to come.